Private sector credit grows to 3%

In their latest money and banking statistics, the Bank of Namibia (BoN) said private sector credit extension has grown from 1,5% in May, to 3% at the end of June.

“Growth in the private sector credit extension rose at the end of June 2023… Overall, banking industry cash balances remained elevated, albeit lower in June 2023, relative to the N$10,9 billion recorded in May 2023,” noted BoN.

The central bank said growth in private sector credit is due to high demand for credit by the household sector over the review period.

BoN noted that credit advances to households increased moderately by 5,3% year-over-year, which is a little bit more than the 5,2% reported at the end of the previous month.

“Mortgage loan demand contributed to this expansion, which was further supported by an increase in instalment credit, as well as personal loans and credit cards that kept the trend going during the review period.”

The central bank noted that overdraft credit also increased at the end of June 2023, turning the tide after declining for five straight months.

“In contrast to a decline of 1,2% at the end of the previous month, overdraft credit climbed by 7,3% in June 2023.

The increase was caused by a growth in this credit category’s demand from businesses in the manufacturing and service sectors over the time period under consideration,” BoN said.

The growth rate for other loans and advances was 3,3% annually, higher than the 1,6% seen in May 2023, noted BoN.

“The increase in the household sector throughout the review period supported the acceleration in growth.

“The annual growth rate for leasing credit and instalment sales increased to 8,5% from 8,0% in the previous month.

The surge was primarily caused by an increase in demand from the business sector, particularly corporates in the manufacturing and construction sectors, throughout the review period.”

The central bank noted that inflation for June 2023 decreased due to lower prices for transportation, food, and non-alcoholic drinks, while inflation for housing remained stable.

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